OnePlus plus has bit into Apple in India, and things may only get worse

Apple is facing not just lower iPhone sales in India during 2018, but even a shrinking userbase as it deals with the likes of Android-based phone maker OnePlus, according to new research data.

The OnePlus 6T.

Sales could fall from 2017's estimated 3 million units to 2 million, Counterpoint Research told Reuters. The iPhone's local userbase is meanwhile forecast to drop 10 percent to 9 million, a far shadow of 436 million Android users.

Half of the new iPhone sales are expected to come from older models, owing to the cost of the product in the country. Because the only iPhones assembled locally have been the SE and 6s, Apple is thought to import between 70 and 80 percent of what it sells, subjecting the company to high import duties intended to encourage local industry. Apple is the only major phone vendor which doesn't do manufacturing in India.

"Apple doesn't have enough confidence... in the Indian manufacturing system right now, to set up plants and move some of the manufacturing out of China," commented IDC analyst Navkendar Singh. "In the process they are losing around 15-20 percent of their tax incentive... which they could have passed on to the consumer."

Apple has traditionally declined to produce low-cost new phones, preferring to target "premium" customers. But even in the market of smartphones over $400, Apple reportedly sat behind Samsung and OnePlus in the September quarter.

OnePlus in particular is believed to be a rising challenger. The company is known for offering relatively high-end performance for a low price, and its latest device -- the OnePlus 6T -- is about half the cost of an iPhone XR in India.

In the past few months, about 10 to 15 percent of OnePlus' new customers have been switching from iPhones, the firm's Indian head told Reuters.

Apple has reportedly slashed the number of distributors in the country from five to two. Reuters sourced indicated that recent executive departures were likely linked to this.

Apple in India

Manufacturing the iPhone SE and possibly other devices in the future with expansion in India fulfills a number of conditions imposed on Apple as a condition of doing business in the future, along with providing tax breaks. However, the new demands that Apple is making in order to expand manufacturing in the country may pose a problem in the long run -- or may just be a tactic that the government has used in the past of "leaking" information, and essentially negotiating through the press.

Assembly of the iPhone SE at the Karnataka Wistron facility began in mid-May of 2017. Officials in the Indian government hope the price for the iPhone SE will be cut over time by as much as $100 compared to the current local price, though Apple is likely to try and avoid too much of a reduction in order to preserve its margins. That price cut has not happened as of yet.

The first iPhone SE models built in India by Wistron went on sale in various cities around India in June of 2017. The devices are marked "Designed by Apple in California, Assembled in India."

As far as sales channels are concerned, Apple is considering flagship stores in New Delhi, Bangalore, and Mumbai -- all three locations where most of India consumers wealth is centered. This is in addition to the Apple Authorized Reseller expansion that Apple was said to be examining in March 2017.

In January of 2018, the India government modified its taxation and sourcing laws that allow "single-brand retailers" that are foreign owned to temporarily meet a 30 percent sourcing requirement by buying goods made in India and selling them in other countries. The waiver is for five years, at which point, the company would be required to source 30 percent of its goods sold in retail stores from within the country.

Like Tim Cook said, India is a long term investment for Apple. Those One Plus users will turn into future Samsung users & so on. The Indian government doesn’t want their people to even own refurbished iPhones.That tells me more than enough.

The problem is a lot more complicated than just the pricing. Why would anyone want to pay a >100% premium over the nearest competition (Galaxy Note 9) when half the features which make iPhones a joy to use in the US don’t even work in the country? Apple Pay, Apple Maps, Siri, Apple News, Apple TV App... the list is endless. The privacy angle doesn’t work either, since people are forced to use Google services like Maps even when they use the iPhone. If my data is going to Google anyway, I might as well use an Android which is seamlessly integrated into the Google ecosystem and costs less then half as much!

A couple of years ago, the longevity of Apple devices was a compelling reason to buy them. But at current prices, when one can buy two flagship smartphones like Note 9 and still be left with some cash, the argument is rendered moot. And unlike people in the western world, most Indians don’t exactly know a lot of people who own iPhones, making iMessages/FaceTime just another gimmick. If anything, iPhones no longer “just work” the way they were famous for. For example, Samsung Pay is almost universally accepted throughout the country thanks to MST which doesn’t need an overhaul of the POS terminals. Combined with Google Pay/UPI, an Android Phone works almost everywhere. Google Assistant actually works and provides information about things that Indians actually care about. SMS is another such example. One just has to look at Microsoft SMS app to see how far Apple has been left behind — iPhones don’t even allow you to segregate personal messages from commercial ones like those from your telecom operator — or to manually unmark a message once it has been marked as spam.

I recently decided to upgrade from my aging iPhone 7 Plus, and as a longtime iPhone user and evangelist, my first preference was naturally an iPhone XS Max. But when I realised that the device costs around 124,900 INR — approximately 1,725 USD — for the 256 GB model I wanted, I just couldn’t justify the purchase. Not when the Note 9 — which does a lot more for a power user like me than any iPhone — is available for 61,000 INR — approximately 840 USD. Was the price a factor? Certainly! But I would still have paid the price if iPhones worked for me the way they do for someone in the US. I have used an iPhone in the US — and I found it an absolute joy to use — miles ahead of any Android. But why would I want to pay twice the amount for a device which doesn’t even work they way it is advertised?

Don’t get me wrong — I am not someone who had an epiphany that Android is so much better. No, I still believe that iOS ecosystem is far superior to anything Android has to offer — although the gap is narrowing with every passing year. I am just a longtime Indian iPhone user who is frustrated by the lack of commitment Apple has shown the Indian market — no matter how bullish Tim Cook might feel.

And that is the crux of the problem — a serious lack of commitment to the market. Given the way Apple has been building things for the Chinese users, I — along with several others — had seriously hoped that Apple would do similar things for India. At this point, I don’t believe it is a matter of resources or priorities anymore. It’s a simple lack of commitment. At this point, an iPhone has become a mere rich snob’s toy in India — the kind of people who use it more or less like a feature phone of the past. The real Apple loyalists have slowly been slipping away. And given how much of a pain it is to switch platforms — and that Android is not as horrible as it used to be — they are unlikely to come back once gone.

Oh, and by the way, OnePlus (and Xiaomi, to a lesser extant) is successful not just because of the pricing — although that is certainly a factor. A major factor is that they actually listen to what the users want and deliver to the best of their abilities. Apple, on the other hand, is content to sit in their ivory tower and decide what is best for their users. While the Android world has progressed by leaps and bounds over the past few years, the iPhone has stagnated — iterating over the same old device over and over. Reminds me of Microsoft of 2000s — content to milk the cash cow by whatever means they could — including flashy marketing and gimmicky features like Animoji — while ignoring the real problems.

Like Tim Cook said, India is a long term investment for Apple. Those One Plus users will turn into future Samsung users & so on. The Indian government doesn’t want their people to even own refurbished iPhones.That tells me more than enough.

If Apple is playing the long term game here, they are in for a rude shock. As the ecosystems mature and people grow up with them, it gets harder and harder to get them to switch. It was easier when Android was a bumbling mess. And in many way, it still is, but it is getting better with every passing year. While it may not become as polished as iOS any time soon, it is already near the threshold where many people consider it “good enough.” All of this has happened before with Windows and macOS.

And what is wrong with the Indian Government not wanting to let the country be used as a dumping ground for e-waste? I, for one, fully support the decision.

In advertisements in upscale Indian magazines like SAVVY you see (unsurprisingly) Google app given best placement over Apple (whereas in US, Apple is usually first). "Inductor" above makes some good points. And even if prosperous Indians can buy iPhones in US, you gotta wonder if they would continue to use them on return to Mumbai. At some point, it'll be hard if not impossible for Apple to play catchup if ecosystem lags so much. In the globe's largest democracy, with hundreds of millions of English speakers, a state that just launched their first nuclear ballistic missile submarine and which will be bigger than China before next century, it's a head scratcher to me why world's most valuable company continues to have so many problems-- even as other US rivals do better there. The surveys of Indian users from BAML continue to show aspiration for iPhones is high. Go figure.

Well, you charge more for a product in a country where people earn less that also contains plenty of near-equal alternatives at around half the cost and your market share is naturally going to be low and dwindle.

Like Tim Cook said, India is a long term investment for Apple. Those One Plus users will turn into future Samsung users & so on. The Indian government doesn’t want their people to even own refurbished iPhones.That tells me more than enough.

If Apple is playing the long term game here, they are in for a rude shock. As the ecosystems mature and people grow up with them, it gets harder and harder to get them to switch. It was easier when Android was a bumbling mess. And in many way, it still is, but it is getting better with every passing year. While it may not become as polished as iOS any time soon, it is already near the threshold where many people consider it “good enough.” All of this has happened before with Windows and macOS.

And what is wrong with the Indian Government not wanting to let the country be used as a dumping ground for e-waste? I, for one, fully support the decision.

Yes, I understand the refurbished issue is a touchy one in a country where people are still alive who remember life as British colonials. It's interesting since UK has one of highest rates of buying refurbished Apple gear. And rates buying used Apple gear are pretty high in US too, where there is no stigma and it comes with a guarantee and fresh battery and box if you buy from Apple. As the smart phone industry matures, and the durability and free SW upgrades of Apple become more widely appreciated, I expect this refurbished market will get even more popular in US and elsewhere. (It might be one reason why Apple killed SE in US.) But of course this refurbished issue is something that India has to determine and decide whether to come around on its own. Evidently from your "dumping ground for e-waste" comment, there is a way to go.

Like Tim Cook said, India is a long term investment for Apple. Those One Plus users will turn into future Samsung users & so on. The Indian government doesn’t want their people to even own refurbished iPhones.That tells me more than enough.

If Apple is playing the long term game here, they are in for a rude shock. As the ecosystems mature and people grow up with them, it gets harder and harder to get them to switch. It was easier when Android was a bumbling mess. And in many way, it still is, but it is getting better with every passing year. While it may not become as polished as iOS any time soon, it is already near the threshold where many people consider it “good enough.” All of this has happened before with Windows and macOS.

And what is wrong with the Indian Government not wanting to let the country be used as a dumping ground for e-waste? I, for one, fully support the decision.

I know iPhone 2Gs that still work reliably. That e waste argument is total nonsense.US enjoys refurbished phones, so does Japan.Its the Indian governments stupid politicies that lets consumers down.Ironically ave. Indian has to change phones every 6 months due to issues, so e waste is being created anyways. So Indians are moving towards dumb phones now.

Like Tim Cook said, India is a long term investment for Apple. Those One Plus users will turn into future Samsung users & so on. The Indian government doesn’t want their people to even own refurbished iPhones.That tells me more than enough.

If Apple is playing the long term game here, they are in for a rude shock. As the ecosystems mature and people grow up with them, it gets harder and harder to get them to switch. It was easier when Android was a bumbling mess. And in many way, it still is, but it is getting better with every passing year. While it may not become as polished as iOS any time soon, it is already near the threshold where many people consider it “good enough.” All of this has happened before with Windows and macOS.

And what is wrong with the Indian Government not wanting to let the country be used as a dumping ground for e-waste? I, for one, fully support the decision.

I know iPhone 2Gs that still work reliably. That e waste argument is total nonsense.US enjoys refurbished phones, so does Japan.Its the Indian governments stupid politicies that lets consumers down.Ironically ave. Indian has to change phones every 6 months due to issues, so e waste is being created anyways. So Indians are moving towards dumb phones now.

Really? Can you use an iPhone 2G as anything more than a feature phone in 2018? And what makes you think that Indians switch phones every 6 months? Or that Indians are moving towards dumb phones? Can you cite any sources? And see my response to “Folio” about e-waste. To summarise, Apple has a significant presence in US/UK/Japan and they take care of disposing/recycling end-of-life devices — India has no such mechanism. Also, I don’t really expect that the US or the UK need to import refurbished devices — unless you count devices being exported for refurbishing and being re-imported.

Like Tim Cook said, India is a long term investment for Apple. Those One Plus users will turn into future Samsung users & so on. The Indian government doesn’t want their people to even own refurbished iPhones.That tells me more than enough.

If Apple is playing the long term game here, they are in for a rude shock. As the ecosystems mature and people grow up with them, it gets harder and harder to get them to switch. It was easier when Android was a bumbling mess. And in many way, it still is, but it is getting better with every passing year. While it may not become as polished as iOS any time soon, it is already near the threshold where many people consider it “good enough.” All of this has happened before with Windows and macOS.

And what is wrong with the Indian Government not wanting to let the country be used as a dumping ground for e-waste? I, for one, fully support the decision.

I know iPhone 2Gs that still work reliably. That e waste argument is total nonsense.US enjoys refurbished phones, so does Japan.Its the Indian governments stupid politicies that lets consumers down.Ironically ave. Indian has to change phones every 6 months due to issues, so e waste is being created anyways. So Indians are moving towards dumb phones now.

Really? Can you use an iPhone 2G as anything more than a feature phone in 2018? And what makes you think that Indians switch phones every 6 months? Or that Indians are moving towards dumb phones? Can you cite any sources? And see my response to “Folio” about e-waste. To summarise, Apple has a significant presence in US/UK/Japan and they take care of disposing/recycling end-of-life devices — India has no such mechanism. Also, I don’t really expect that the US or the UK need to import refurbished devices — unless you count devices being exported for refurbishing and being re-imported.

Yeah . Email ,Safari for YouTube & Facebook still work on the 2G.Yeah, indians are moving from android phones to dumb jio phones & others. Search the web for the link. I think I read it on economictimes.indiatimes.

Like Tim Cook said, India is a long term investment for Apple. Those One Plus users will turn into future Samsung users & so on. The Indian government doesn’t want their people to even own refurbished iPhones.That tells me more than enough.

If Apple is playing the long term game here, they are in for a rude shock. As the ecosystems mature and people grow up with them, it gets harder and harder to get them to switch. It was easier when Android was a bumbling mess. And in many way, it still is, but it is getting better with every passing year. While it may not become as polished as iOS any time soon, it is already near the threshold where many people consider it “good enough.” All of this has happened before with Windows and macOS.

And what is wrong with the Indian Government not wanting to let the country be used as a dumping ground for e-waste? I, for one, fully support the decision.

I know iPhone 2Gs that still work reliably. That e waste argument is total nonsense.US enjoys refurbished phones, so does Japan.Its the Indian governments stupid politicies that lets consumers down.Ironically ave. Indian has to change phones every 6 months due to issues, so e waste is being created anyways. So Indians are moving towards dumb phones now.

Really? Can you use an iPhone 2G as anything more than a feature phone in 2018? And what makes you think that Indians switch phones every 6 months? Or that Indians are moving towards dumb phones? Can you cite any sources? And see my response to “Folio” about e-waste. To summarise, Apple has a significant presence in US/UK/Japan and they take care of disposing/recycling end-of-life devices — India has no such mechanism. Also, I don’t really expect that the US or the UK need to import refurbished devices — unless you count devices being exported for refurbishing and being re-imported.

Yeah . Email ,Safari for YouTube & Facebook still work on the 2G.Yeah, indians are moving from android phones to dumb jio phones & others. Search the web for the link. I think I read it on economictimes.indiatimes.

And those run equally well on a feature phone. On the other hand, many apps (like WhatsApp) have been cutting off older phones — including older iPhones. And Indians are not switching from Android to Jio phones — at least not in significant numbers. Jio Phone has been so successful because it managed to get people who have never used anything beyond a dumb phone — uneducated people from rural areas, for example — to use data services (LTE). That, and a lot of people use it as a backup phone/hotspot. Jio Phone is serviceable, but not good enough to replace a smartphone — even a low-end Android. Its achievement is to bring millions of new users into the smartphone sphere.

It's unlikely Apple will ever stand a chance in India within the next five years. The way Apple keeps jacking up iPhone prices, I don't see how anyone in that country can afford or even want to buy an iPhone when they have so many less expensive Android smartphones to choose from. The Apple ecosystem is probably non-existent in India because there likely aren't many Mac desktops or laptops being sold in the country. I've already faced the fact that Apple will not make any headway in any of the BRIC nations. Apple basically said to all the Android manufacturers, "These countries are completely yours to take 98% market share to our 2%." That's a really discouraging thing for Apple shareholders to have to hear. It's a crushing defeat by all Android manufacturers. Four huge countries and Apple can't even get a teeny, tiny worth of a grip in terms of market percentage. It's no wonder Wall Street has given Apple such a kick in the nuts for the last week or so. Now, Apple has to be the only tech company struggling to make share gains while the FANGS and Microsoft are freaking knocking it out of the ballpark.

I always hear about reversals of fortunes and now Apple is on the negatively receiving end of said reversal. Everyone is always happy to see Apple stock end up in the toilet and now they're all having a good laugh at the former trillion-dollar company. They were all sure it wouldn't last for Apple and now they're right. I'm not actually worried as long as I'm receiving my fine Apple dividends. It just kind of hurts how Apple is being left out in the cold while the rest of the tech stocks are burning hot. Only Apple has to worry about things like peak iPhone every single quarter. There hasn't been anything close to an iPhone 'supercycle' in the past few years, so why do some people keep talking about it happening.

Dual SIMs are very important. Until Apple's implementation works well and with every network provider, it'll be an uphill battle.

It's nothing to do with dual sims, this is all about value for money. Apple have increased prices and nipped and tucked to create maximum profit for their share holders. Apple prices in the UK are around 20% higher than this time last year, because they think rich people will just keep paying the extra, making up for reduced sales. You have to remember most indians first smartphone will have been android. Those that moved to apple realise the grass isn't always greener and therefore have no issue switching back. Once switched back to something like a OnePlus 6T they won't be switching back again, as the iPhone is not worth nearly double the price and you still don't get a fast charger or a full HD screen in the box.

It's unlikely Apple will ever stand a chance in India within the next five years. The way Apple keeps jacking up iPhone prices, I don't see how anyone in that country can afford or even want to buy an iPhone when they have so many less expensive Android smartphones to choose from. The Apple ecosystem is probably non-existent in India because there likely aren't many Mac desktops or laptops being sold in the country. I've already faced the fact that Apple will not make any headway in any of the BRIC nations. Apple basically said to all the Android manufacturers, "These countries are completely yours to take 98% market share to our 2%." That's a really discouraging thing for Apple shareholders to have to hear. It's a crushing defeat by all Android manufacturers. Four huge countries and Apple can't even get a teeny, tiny worth of a grip in terms of market percentage. It's no wonder Wall Street has given Apple such a kick in the nuts for the last week or so. Now, Apple has to be the only tech company struggling to make share gains while the FANGS and Microsoft are freaking knocking it out of the ballpark.

I always hear about reversals of fortunes and now Apple is on the negatively receiving end of said reversal. Everyone is always happy to see Apple stock end up in the toilet and now they're all having a good laugh at the former trillion-dollar company. They were all sure it wouldn't last for Apple and now they're right. I'm not actually worried as long as I'm receiving my fine Apple dividends. It just kind of hurts how Apple is being left out in the cold while the rest of the tech stocks are burning hot. Only Apple has to worry about things like peak iPhone every single quarter. There hasn't been anything close to an iPhone 'supercycle' in the past few years, so why do some people keep talking about it happening.

The party's over... dum-de-dum-dum. (sung in a wistful voice)

Blame Tim Cook and the rest of the apple board who aren't interested in anyone who hasn't got a big bank balance, they aren't interested in the "junk market" so they said.

Android is the phone of the people, just as Toyota is the king of cars worldwide. Not everyone has to drive around in a mercedes to get from a to b.

It's unlikely Apple will ever stand a chance in India within the next five years. The way Apple keeps jacking up iPhone prices, I don't see how anyone in that country can afford or even want to buy an iPhone when they have so many less expensive Android smartphones to choose from. The Apple ecosystem is probably non-existent in India because there likely aren't many Mac desktops or laptops being sold in the country. I've already faced the fact that Apple will not make any headway in any of the BRIC nations. Apple basically said to all the Android manufacturers, "These countries are completely yours to take 98% market share to our 2%." That's a really discouraging thing for Apple shareholders to have to hear. It's a crushing defeat by all Android manufacturers. Four huge countries and Apple can't even get a teeny, tiny worth of a grip in terms of market percentage. It's no wonder Wall Street has given Apple such a kick in the nuts for the last week or so. Now, Apple has to be the only tech company struggling to make share gains while the FANGS and Microsoft are freaking knocking it out of the ballpark.

I always hear about reversals of fortunes and now Apple is on the negatively receiving end of said reversal. Everyone is always happy to see Apple stock end up in the toilet and now they're all having a good laugh at the former trillion-dollar company. They were all sure it wouldn't last for Apple and now they're right. I'm not actually worried as long as I'm receiving my fine Apple dividends. It just kind of hurts how Apple is being left out in the cold while the rest of the tech stocks are burning hot. Only Apple has to worry about things like peak iPhone every single quarter. There hasn't been anything close to an iPhone 'supercycle' in the past few years, so why do some people keep talking about it happening.

The party's over... dum-de-dum-dum. (sung in a wistful voice)

Blame Tim Cook and the rest of the apple board who aren't interested in anyone who hasn't got a big bank balance, they aren't interested in the "junk market" so they said.

Android is the phone of the people, just as Toyota is the king of cars worldwide. Not everyone has to drive around in a mercedes to get from a to b.

Toyota actually makes a profit. The only Android vendor that makes any kind of profit is Samsung.

It is also fun to pretend that High-end Android devices are not ‘expensive’. The Mate20 is launching in Canada for $1300, the Note 9 is $1249. So, much more affordable! These are not the devices being sold in India. Cheap sub-$200 phones probably are the most popular and no one is making profit on those.

Good for One Plus but let’s see who the flavor of the week Android vendor of choice is in a couple years. A couple years ago Samsung was Android vendor of choice with no other really good option. Time will tell.